Brexit turmoil drives UK towards recession

Country’s economy shrinks for the first time since 2012; analysts fear worse

Agencies

August 10, 2019, 08:23 IST

UK’s Chancellor Sajid Javid said that the global economy was slowing, but highlighted other recent positive data for the UK. Country’s economy shrinks for the first time since 2012; analysts fear worse

LONDON Britain’s economy unexpectedly shrank in the second quarter of the year on Brexit turmoil, official data showed on Friday, placing the country on the verge of recession.

Gross domestic product (GDP) fell 0.2 per cent in the April-June period, the first time the economy has contracted in almost seven years, the Office for National Statistics (ONS) said in a statement.

The data, which was worse than market expectations for zero growth and also reflects global economic strains, sent the pound sliding against the euro and dollar.

Another contraction in the current third quarter would put Britain in official recession, ahead of the nation’s expected withdrawal from the EU at the end of October.

“The latest data reveal an economy in decline and skirting with recession as headwinds from slower global economic growth are exacerbated by Brexit-related paralysis,” said IHS Markit economist Chris Williamson.

“GDP contracted in the second quarter for the first time since 2012 after robust growth in the first quarter,” said Rob Kent Smith, ONS head of GDP.

UK’s Chancellor Sajid Javid said that the global economy was slowing, but highlighted other recent positive data for the UK.

“This is a challenging period across the global economy, with growth slowing in many countries,” said Javid.

“But the fundamentals of the British economy are strong – wages are growing, employment is at a record high and we're forecast to grow faster than Germany, Italy and Japan this year. “The government is determined to provide certainty to people and businesses on Brexit -- that's why we are clear that the UK is leaving the EU on 31October,” he added.

New fast-track visa route for scientists

The UK government has unveiled plans to work with the country’s scientific community to develop a fast-track visa route for the “brightest and best”, in a bid to attract the world's top scientists to Britain after Brexit to bolster its standing as a hub for research and innovation.

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